Workspace's annual general meeting on July 23rd promises to be a pivotal moment for the FTSE 250 company as activist investor Saba Capital Management pushes for an accelerated wind-down of its property portfolio. The New York-based hedge fund, led by founder Boaz Weinstein, has submitted six motions to Workspace's AGM, seeking to force the company into a rapid sale of its assets and utilise the proceeds in share buybacks. In response, Workspace has urged investors to reject these proposals, citing concerns that becoming a "forced seller" would lead to a deterioration in property values.
Saba's strategy aims to realise shareholder value quickly, with a partner at the hedge fund stating that prioritising significant property sales and share buybacks could generate meaningful returns sooner than Workspace's current disposal plan. However, Workspace's board has countered that this approach is "high risk, short-sighted and not suitable" for the business. The company also questioned Saba's claim of having identified a "disposal roadmap" and a list of potential buyers, stating that none of the named parties have demonstrated interest in acquiring Workspace assets.
The dispute extends to the valuation of past property sales, with Saba pointing to 13 properties sold last year at an average discount of 7.2 per cent. However, Workspace disputed these figures, stating that these properties were actually sold at a 19.6 per cent discount to their value six months prior to sale, rather than at the point of sale. The company added that it has sold a further three properties this year at an average discount of 22.3 per cent.
Workspace, which reported a £121m pre-tax loss and cut its dividend due to nearly £160m in property valuation write-downs, is urging shareholders to trust its own strategic direction. The company emphasised its deep understanding of its markets, customer base, and buildings, suggesting its board possesses the necessary expertise to navigate the current climate and deliver long-term value.
Workspace's appeal to investors comes as the company implements a strategy to sell off underperforming properties and invest in modernising its workspaces to meet changing market demands. With Saba's proposals set to be put to a shareholder vote, Workspace faces a significant test of its ability to execute its business plan and deliver value for shareholders.
The outcome of the AGM will have far-reaching implications for Workspace's future trajectory, with potential consequences for the company's property portfolio, investor confidence, and long-term prospects. As the dispute between Saba and Workspace continues to unfold, investors are advised to carefully consider the implications of each proposal before casting their votes.